Prime Trust Action Group Unitholder Update No. 1 – 30 November 2010

First of all, we would like to thank the many unitholders that have already registered their support for our proposed class action against various parties associated with the Prime Retirement & Aged Care Property Trust. In a short space of time, we have already had unitholders representing more than 110m units (approximately 20% of the total unitholder base) register their support.

The background to this proposed class action is that three of us (Don Steel, Roger Pratt and Steve O’Reilly) had been independently investigating the Trust in order to determine how the parlous financial state the Trust recently found itself in could have eventuated. Don Steel and Steve O’Reilly are both Sydney-based unitholders in the Trust and Roger Pratt works for a Perth advisory firm which has a large number of clients invested in the Trust. The more we researched the Trust, the more issues we uncovered and the more instances we found where we consider that the Responsible Entity did not act in the best interests of unitholders. Eventually the three of us made contact with each other and were able to pool our resources in working towards a collective unitholder action.

Work is continuing on documenting the alleged acts committed by not only the Trust’s Responsible Entity but also by other associated parties, and many fruitful discussions have been held recently with lawyers, litigation funding companies and ASIC. There has also been some recent media coverage of our proposed class action by the Australian Financial Review and media interest in our case continues to build. Some of the recent press articles about the Trust are included on our website.

On 18 October 2010, Australian Property Custodian Holdings Ltd, the Responsible Entity for the Trust, was placed in voluntary administration and Mr Stirling Horne and Mr Peter Vrsecky from Lawler Draper Dillon were appointed administrators. On 11 November 2010, the first creditors’ meeting of the Trust and Responsible Entity was held in Melbourne. During the course of that meeting, a Creditors’ Committee was formed and Steve O’Reilly was included on this Committee as a representative of unitholders. The administrators have acknowledged that, although their initial focus will be on creditors’ claims, they also have a responsibility to unitholders. Information about the types of issues that unitholders are concerned about, and the potential class action, has been provided to the administrators, and dialogue with the administrators is expected to continue for several months. The administrators also wrote to all unitholders on 26 November 2010 with an update on their investigations and with details of proposed unitholder briefings scheduled for January 2011.

As you know, the costs of establishing the action group have been funded to date by ourselves and we are not seeking contributions from fellow unitholders in order to pursue this matter. Many of you, however, have offered your services in order to advance our collective effort. At this stage, we have only mailed out details of the action group to 500 unitholders (out of 10,000 unitholders in total). Thanks to those unitholders who have kindly assisted with the mailouts to date. If you are able to help us broaden our reach and undertake a mailout to a further batch of unitholders, then please contact Steve O’Reilly. For example, if you were able to mailout a further batch of 100 unitholders, the cost to you, including postage, envelopes and photocopying, may be around $100.

Thank you once again for your support to date, we look forward to providing further updates as developments occur and please remember to check the website regularly for further news.

Steve O’Reilly
(on behalf of Prime Trust Action Group)

Note: This communication does not constitute advice and is intended solely for the use of Prime Retirement & Aged Care Property Trust unit holders and their financial advisers.  

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